Arcbest Corp 10-Q for FY2020 Q1

Arcbest Corp /Tx/ (ARCB)

10-Q 2020-05-11 For: 2020-03-31

Added on April 04, 2026

About this 10-Q

Arcbest Corp filed this 10-Q on May 11, 2020, covering the quarter ended March 31, 2020 (FY2020 Q1).

Headline figures

Quarter ended March 31, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $701.4M; down 1.5% from $711.84M a year earlier
Net income: $1.9M; down 61.1% from net income of $4.89M a year earlier
Diluted EPS: $0.07; down 61.1% from $0.18 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock $0.01 Par Value	ARCB	Nasdaq


	Large accelerated filer ☒		Accelerated filer ☐
	Non-accelerated filer ☐		Smaller reporting company ☐
	Emerging growth company ☐


Class		Outstanding at May 1, 2020
Common Stock, $0.01 par value		25,262,470 shares


		Page

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets — March 31, 2020 and December 31, 2019	3

	Consolidated Statements of Operations — For the Three Months Ended March 31, 2020 and 2019	4

	Consolidated Statements of Comprehensive Income — For the Three Months Ended March 31, 2020 and 2019	5

	Consolidated Statement of Stockholders’ Equity — For the Three Months Ended March 31, 2020 and 2019	6

	Consolidated Statements of Cash Flows — For the Three Months Ended March 31, 2020 and 2019	7

	Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	49

Item 4.	Controls and Procedures	49

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	50

Item 1A.	Risk Factors	50

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51

Item 3.	Defaults Upon Senior Securities	51

Item 4.	Mine Safety Disclosures	51

Item 5.	Other Information	51

Item 6.	Exhibits	52

SIGNATURES		53


	March 31		December 31
	2020		2019
	(Unaudited)
	(in thousands, except share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	352,165	$	201,909
Short-term investments		178,810		116,579
Accounts receivable, less allowances (2020 – $6,111; 2019 – $5,448)		278,783		282,579
Other accounts receivable, less allowances (2020 – $646; 2019 – $476)		15,276		18,774
Prepaid expenses		33,806		30,377
Prepaid and refundable income taxes		6,231		9,439
Other		4,460		4,745
TOTAL CURRENT ASSETS		869,531		664,402
PROPERTY, PLANT AND EQUIPMENT
Land and structures		343,527		342,122
Revenue equipment		885,949		896,020
Service, office, and other equipment		230,163		233,354
Software		154,749		151,068
Leasehold improvements		11,022		10,383
		1,625,410		1,632,947
Less allowances for depreciation and amortization		961,950		949,355
PROPERTY, PLANT AND EQUIPMENT, net		663,460		683,592
GOODWILL		88,320		88,320
INTANGIBLE ASSETS, net		57,873		58,832
OPERATING RIGHT-OF-USE ASSETS		73,324		68,470
DEFERRED INCOME TAXES		8,145		7,725
OTHER LONG-TERM ASSETS		73,703		79,866
TOTAL ASSETS	$	1,834,356	$	1,651,207

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	127,625	$	134,374
Income taxes payable		31		12
Accrued expenses		217,678		232,321
Current portion of long-term debt		56,977		57,305
Current portion of operating lease liabilities		20,542		20,265
TOTAL CURRENT LIABILITIES		422,853		444,277
LONG-TERM DEBT, less current portion		476,945		266,214
OPERATING LEASE LIABILITIES, less current portion		56,716		52,277
POSTRETIREMENT LIABILITIES, less current portion		20,411		20,294
OTHER LONG-TERM LIABILITIES		35,058		38,892
DEFERRED INCOME TAXES		63,167		66,210
STOCKHOLDERS’ EQUITY
Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2020: 28,817,109 shares, 2019: 28,810,902 shares		288		288
Additional paid-in capital		336,064		333,943
Retained earnings		532,858		533,187
Treasury stock, at cost, 2020: 3,554,639 shares; 2019: 3,404,639 shares		(107,740)		(104,578)
Accumulated other comprehensive income (loss)		(2,264)		203
TOTAL STOCKHOLDERS’ EQUITY		759,206		763,043
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,834,356	$	1,651,207


	Three Months Ended
	March 31
	2020		2019
	(Unaudited)
	(in thousands, except share and per share data)
REVENUES	$	701,399	$	711,839

OPERATING EXPENSES		693,580		703,248

OPERATING INCOME		7,819		8,591

OTHER INCOME (COSTS)
Interest and dividend income		1,375		1,478
Interest and other related financing costs		(2,947)		(2,882)
Other, net		(3,862)		(591)
		(5,434)		(1,995)

INCOME BEFORE INCOME TAXES		2,385		6,596

INCOME TAX PROVISION		483		1,708

NET INCOME	$	1,902	$	4,888

EARNINGS PER COMMON SHARE
Basic	$	0.07	$	0.19
Diluted	$	0.07	$	0.18

AVERAGE COMMON SHARES OUTSTANDING
Basic		25,390,377		25,570,415
Diluted		26,246,800		26,512,349

CASH DIVIDENDS DECLARED PER COMMON SHARE	$	0.08	$	0.08


	December 31, 2019
			Fair Value Measurements Using
			Quoted Prices		Significant		Significant
			In Active		Observable		Unobservable
			Markets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
	(in thousands)
Assets:
Money market funds⁽¹⁾	$	20,540	$	20,540	$	—	$	—
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan⁽²⁾		2,427		2,427		—		—
	$	22,967	$	22,967	$	—	$	—
Liabilities:
Interest rate swaps⁽³⁾	$	563	$	—	$	563	$	—


		March 31, 2020						December 31, 2019
	Weighted-Average			Accumulated		Net				Accumulated		Net
	Amortization Period	Cost		Amortization		Value			Cost	Amortization		Value
	(in years)	(in thousands)						(in thousands)
Finite-lived intangible assets
Customer relationships	14	$	52,721	$	27,621	$	25,100	$	52,721	$	26,667	$	26,054
Other	11		1,315		842		473		1,294		816		478
	14		54,036		28,463		25,573		54,015		27,483		26,532
Indefinite-lived intangible assets
Trade name	N/A		32,300		N/A		32,300		32,300		N/A		32,300

Total intangible assets	N/A	$	86,336	$	28,463	$	57,873	$	86,315	$	27,483	$	58,832


	Amortization of
	Intangible Assets
	(in thousands)
Remainder of 2020	$	2,930
2021		3,869
2022		3,842
2023		3,744
2024		3,695
Thereafter		7,493
Total amortization	$	25,573


	Three Months Ended
	March 31, 2020		March 31, 2019
	(in thousands)
Operating lease expense	$	5,796	$	5,339
Variable lease expense		1,040		839
Sublease income		(92)		(67)

Total operating lease expense	$	6,744	$	6,111


					Equipment
			Land and		and
	Total		Structures⁽¹⁾		Other
	(in thousands)
Remainder of 2020	$	17,679	$	16,935	$	744
2021		18,426		18,145		281
2022		13,922		13,911		11
2023		10,459		10,459		—
2024		7,817		7,817		—
Thereafter		16,891		16,891		—
Total lease payments		85,194		84,158		1,036
Less imputed interest		(7,936)		(7,917)		(19)
Total	$	77,258	$	76,241	$	1,017


					Accounts
					Receivable
			Credit		Securitization		Notes		Finance Lease
	Total		Facility⁽¹⁾		Program⁽¹⁾		Payable		Obligations
	(in thousands)
Due in one year or less	$	68,124	$	4,233	$	1,245	$	62,639	$	7
Due after one year through two years		147,955		4,087		85,583		58,278		7
Due after two years through three years		51,217		4,414		—		46,803		—
Due after three years through four years		34,303		4,678		—		29,625		—
Due after four years through five years		266,658		252,430		—		14,228		—
Due after five years		—		—		—		—		—
Total payments		568,257		269,842		86,828		211,573		14
Less amounts representing interest		34,335		19,842		1,828		12,665		—
Long-term debt	$	533,922	$	250,000	$	85,000	$	198,908	$	14


	Three Months Ended March 31
	Nonunion Defined				Supplemental				Postretirement
	Benefit Pension Plan				Benefit Plan				Health Benefit Plan
	2020⁽¹⁾		2019		2020		2019		2020⁽²⁾		2019
	(in thousands)
Service cost	$	—	$	—	$	—	$	—	$	47	$	80
Interest cost		—		318		3		10		144		303
Expected return on plan assets		—		(90)		—		—		—		—
Amortization of prior service credit		—		—		—		—		—		(9)
Pension settlement expense⁽³⁾		—		1,356		89		—		—		—
Amortization of net actuarial (gain) loss⁽⁴⁾		—		149		4		24		(149)		225
Net periodic benefit cost	$	—	$	1,733	$	96	$	34	$	42	$	599


			Unrecognized			Interest	Foreign
			Net Periodic			Rate	Currency
	Total		Benefit Costs			Swap	Translation
	(in thousands)
Balances at December 31, 2019	$	203	$	2,152	$	(416)	$	(1,533)

Other comprehensive loss before reclassifications		(2,425)		(8)		(997)		(1,420)
Amounts reclassified from accumulated other comprehensive income		(42)		(42)		—		—
Net current-period other comprehensive loss		(2,467)		(50)		(997)		(1,420)

Balances at March 31, 2020	$	(2,264)	$	2,102	$	(1,413)	$	(2,953)

Balances at December 31, 2018	$	(14,238)	$	(12,749)	$	591	$	(2,080)

Other comprehensive income (loss) before reclassifications		554		661		(332)		225
Amounts reclassified from accumulated other comprehensive loss		1,296		1,296		—		—
Net current-period other comprehensive income (loss)		1,850		1,957		(332)		225

Balances at March 31, 2019	$	(12,388)	$	(10,792)	$	259	$	(1,855)


	Unrecognized Net Periodic
	Benefit Credit (Costs)⁽¹⁾⁽²⁾
	Three Months Ended March 31
	2020		2019
	(in thousands)
Amortization of net actuarial gain (loss)	$	145	$	(398)
Amortization of prior service credit		—		9
Pension settlement expense⁽³⁾		(89)		(1,356)
Total, pre-tax		56		(1,745)
Tax benefit (expense)		(14)		449
Total, net of tax	$	42	$	(1,296)


	Three Months Ended
	March 31
	2020		2019
	(in thousands)
OPERATING ACTIVITIES
Net income	$	1,902	$	4,888
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		28,032		25,409
Amortization of intangibles		981		1,128
Pension settlement expense		89		1,356
Share-based compensation expense		2,181		2,058
Provision for losses on accounts receivable		1,383		112
Change in deferred income taxes		(2,815)		(584)
Gain on sale of property and equipment		(2,130)		(43)
Changes in operating assets and liabilities:
Receivables		3,874		3,931
Prepaid expenses		(3,429)		(5,760)
Other assets		5,800		(141)
Income taxes		2,949		(4,313)
Operating right-of-use assets and lease liabilities, net		(138)		40
Multiemployer pension fund withdrawal liability		(150)		(143)
Accounts payable, accrued expenses, and other liabilities		(15,400)		(31,309)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		23,129		(3,371)

INVESTING ACTIVITIES
Purchases of property, plant and equipment, net of financings		(6,738)		(15,543)
Proceeds from sale of property and equipment		4,692		1,039
Purchases of short-term investments		(73,973)		(13,790)
Proceeds from sale of short-term investments		12,210		4,998
Capitalization of internally developed software		(3,342)		(2,656)
NET CASH USED IN INVESTING ACTIVITIES		(67,151)		(25,952)

FINANCING ACTIVITIES
Borrowings under credit facilities		180,000		—
Borrowings under accounts receivable securitization program		45,000		—
Payments on long-term debt		(14,598)		(15,217)
Net change in book overdrafts		(10,869)		(2,524)
Payment of common stock dividends		(2,033)		(2,052)
Purchases of treasury stock		(3,162)		(2,663)


	March 31				December 31
	2020				2019
	(in thousands)
		Carrying		Fair		Carrying		Fair
		Value		Value		Value		Value
Credit Facility⁽¹⁾	$	250,000	$	250,000	$	70,000	$	70,000
Accounts receivable securitization borrowings⁽²⁾		85,000		85,000		40,000		40,000
Notes payable⁽³⁾		198,908		206,437		213,504		216,432
	$	533,908	$	541,437	$	323,504	$	326,432


	Year Over Year % Change
	Three Months Ended
	March 31, 2020

Revenue per shipment		(3.3%)

Shipments per day		(9.8%)


				Total Number of	Maximum
				Shares Purchased	Approximate Dollar
	Total Number	Average		as Part of Publicly	Value of Shares that
	of Shares	Price Paid		Announced	May Yet Be Purchased
	Purchased	Per Share⁽¹⁾		Program	Under the Program ⁽²⁾
	(in thousands, except share and per share data)
1/1/2020-1/31/2020	—	$	—	—	$	13,197
2/1/2020-2/29/2020	79,500		22.85	79,500	$	11,380
3/1/2020-3/31/2020	70,500		19.09	70,500	$	10,034
Total	150,000	$	21.08	150,000


Exhibit
No.

3.1		Restated Certificate of Incorporation of the Company (previously filed as Exhibit 3.1 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2019, File No. 000-19969, and incorporated herein by reference).

3.2		Certificate of Amendment to the Restated Certificate of Incorporation of the Company (previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on April 24, 2009, File No. 000-19969, and incorporated herein by reference).

3.3		Fifth Amended and Restated Bylaws of the Company dated as of October 31, 2016 (previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on November 4, 2016, File No. 000-19969, and incorporated herein by reference).

3.4		Certificate of Ownership and Merger, effective May 1, 2014, as filed on April 29, 2014 with the Secretary of State of the State of Delaware (previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on April 30, 2014, File No. 000-19969, and incorporated herein by reference).

10.1#		First Amendment to the ArcBest Corporation Ownership Incentive Plan (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on May 7, 2020, File No. 000-19969, and incorporated herein by reference).

10.2#*		The ArcBest 16b Annual Incentive Compensation Plan and form of award.

10.3#*		The ArcBest Long-Term (3-Year) Incentive Compensation Plan and form of award.

10.4#*		Form of Restricted Stock Unit Award Agreement (Non-Employee Directors – with deferral feature).

10.5#*		Form of Restricted Stock Unit Award Agreement (Employees).

31.1*		Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32**		Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*		XBRL Instance Document – the instance document does not appear in the Interactive Data Files because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		Inline XBRL Taxonomy Extension Labels Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104*		The Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document.


	ARCBEST CORPORATION
	(Registrant)

Date: May 11, 2020	/s/ Judy R. McReynolds
	Judy R. McReynolds
	Chairman, President and Chief Executive Officer
	and Principal Executive Officer


Date: May 11, 2020	/s/ David R. Cobb
	David R. Cobb
	Vice President — Chief Financial Officer
	and Principal Financial Officer